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The Bureau of the Census recently announced on March 18, 1947, the results of a veterans' housing survey which it made between July and September 1946. The surveys were made in 70 selected cities and reveal some of the facts about the veterans' housing desires and his income which must be taken into account in considering any housing legislation.
Incidentally, there are also 32 more cities being surveyed and when those are complete, the Bureau of Census will complete the report, with over 102 cities included.
I sincerely hope that every member of this committee will have the occasion to study this survey as it pertains to his own particular area. The survey concretely presents the housing problem when it shows that from 30 to 40 percent of married veterans are living in rented rooms or doubled up with in-laws.
We include rented rooms in the category of doubling up with in-laws because the rented room, as you know, is not an apartment. not include home-cooking facilities, private bath, and so forth.
In Los Angeles County, Calif., for example, fully 50 percent of the married veterans in that area are without desirable living quarters. In the New York City area, some 44 percent of the married veterans fall into this category. For the New Orleans area in Louisiana, the Detroit area of Michigan, and the Philadelphia area of Pennsylvania the figures are respectively 32, 51, and 43 percent.
The survey also vividly demonstrates that veterans cannot afford either the rental or purchase cost of new housing. The median weekly income of veterans is shown to be between $40 and $50. In the majority of cases they cannot afford to pay more than $40 a month rent, and they cannot afford housing costing over $6,000.
Now, I remember when Mr. Wyatt first made his recommendations to the President. His survey, which was over a year ago, reported exactly the same figures as were proven by this Bureau of the Census report taken last summer.
In passing, I would like to add a couple of other figures: One and a half to two million veterans are in the lowest income group and average $30 a week, and therefore cannot afford more than $30 a month rent. So do not be misled by this $40 to $50 income. That is the average. A million and a half to two million are lower than that. These figures present in the cold language of statistics the crushing problem which is facing the veteran. Even under the Wyatt program new housing costing up to $80 a month in rentals and $10,000 approximately in purchase price was permitted.
These figures, as we now know, are rapidly becoming minimums. The Wall Street Journal-I am sure many of you join me in reading that religiously every morning-reported in a survey printed February 17, 1947, that over-all building costs are up 86 percent over 1939 and have reached an all-time peak. In that connection, we are interested in how far they will fall back.
From my talks with some economists, I think that Mayor LaGuardia's estimate of 25 percent below present costs is perhaps even optimistic. Builders are curtailing their programs up to 90 and 95 percent because of the current record high costs, according to the same source. And Mr. Chairman, I would like to include this article in the Wall Street Journal of February 17. It quotes many specific cases from some 11 different cities in which the survey was made.
The CHAIRMAN. It may be so included.
(The article from the Wall Street Journal of February 17 is as follows:)
[From The Wall Street Journal, New York, Monday, February 17, 1947] BUILDING BOOM? IT'S ONLY A PIPE DREAM UNTIL COSTS COME DOWN, WARN CONSTRUCTION MEN-CLEVELANDER PLANS 5 HOMES INSTEAD OF 120 THIS YEAR; MANY GI HOUSES UNSOLD MATERIALS PRICES UP 86 PERCENT The high cost of building threatens to make the "great housing boom of 1947" just a might-have-been.
The phrase "a million homes this year" is tossed about glibly by people in high places. It's counted on as a sturdy prop for roaring business activity this year. It's sort of taken for granted. But ask a builder about these million houses. The chances are he'll just grin. And, queried on the reason for his smiling skepticism, he'll probably say: "High costs."
The Wall Street Journal has asked many builders about the boom in blueprint. It's questioned them in 11 key cities across the Nation. And the consensus among the men who have to put their cash on the barrel head before dream homes take substance is just this:
There won't be a building "boom" until construction costs come off the high horse they now ride.
Building deferred until later this year pending cost contraction may whittle total new home units finished in 1947 to a level far below the hopedfor million.
Vertically climbing prices of building materials have reached a level 86 percent above 1939. Ominously or not, in the week ended February 1 they topped the pinnacle (Bureau of Labor Statistics wholesale index) from which the great ski slide started in 1920. And here, in the words of the builders themselves, is what this means to building plans.
WAITING FOR SANE MARKETS
"I've just pocketed plans for 500 homes," one big Philadelphia builder says. "I won't do anything about them for at least another year or until some measure of saneness returns to the labor and material markets."
And this from a Pittsburgh builder with plans to construct 50 houses this year: "I've already started 10 of them-but I'm going to hold off on the rest until the price picture clears up. After all, I have to sell these houses. People won't pay just anything."
A builder in Cleveland quipped: "Anyone who starts building houses today is cracked."
Another Clevelander said bluntly he will build "at the most" only 5 houses this year, compared with "120 if materials prices had remained at the 1944-45 levels." Still another, specializing in higher-priced homes, said he might erect 6 or 8 this year and added: "It could be 15 if costs were lower." A third, struggling to complete a "batch" of 50 houses already begun, says he's going to "stop, look, and listen" before he starts any more.
CUTS PLANS IN HALF
A Detroit home-building firm which originally planned to start 300 units for sale this year has slashed that figure in half under present schedules. "Common sense won't let us do otherwise," declares an official of the company.
Says another auto-capital builder: "There'd probably be two or three times more homes built this year in Detroit if it weren't for present high costs."
"A lot of people here," echoes a Chicago builder, "are just going to finish what they started in 1946-and then go mighty slow on anything else until there's a marked improvement in the availability of materials at lower prices."
On the west coast, Milton W. Morris of the Associated Home Builders of San Francisco believes there will be no real building boom in 1947. And the chief reason: High costs.
BUILDERS WILL MARK TIME
"I think costs have reached their peak and will have to come down," says Mr. Morris. "If they don't, public reluctance to purchasing new homes will become so strong the building industry will have to mark time until the picture changes.'
One San Francisco area builder has accumulated about 40 lots suitable for apartment houses. But he hasn't started building yet—says he's not even considering a start under present conditions.
William E. Hague, manager of the central California chapter of the Association of General Contractors of America, tied building reluctance to public high-homecost resistance with this neat example:
"I know one builder who thought he had 207 customers waiting anxiously for homes. He built 5-informed the waiters that their houses were complete. Only 3 buyers showed an interest. He has halted plans for further building.”
PLANNED 100, MAY BUILD 30
In Portland, Oreg., a builder who had hoped to erect a hundred homes this year says: "I'm not starting any right now with things the way they are. I may get 25 or 30 built this year." Another Portlander who had earlier planned to put up 100 houses in 1947 now thinks the best he'll do will be 50.
"We've quit building houses for sale until prices come down," says one big Seattle contractor. "Putting up $200,000 or $300,000 worth of houses now would be like a merchant overstocking with the most expensive merchandise he can find.” This builder says he had about 150 sites ready to build on. He put up houses on about a third of them-and then quit. He doesn't expect to be in operation again before July. "This means," says he, "that the next houses I build won't be on the market before around the first of next year."
Over and again, builders and contractors emphasize the spreading gap between what it now costs to build and what people want to pay for finished houses.
THE RACE TRACK
"My office is like a racetrack," wails a contractor in Los Angeles. "Plenty of people interested in new houses race in here, but the way they race out when I talk of costs makes it seem that they hardly slow down on their way through. Most of them, when they hear the estimate, which is always a few thousand dollars more than they figured on, say they'll wait till things come down."
Among those "waiting" are a good many veterans-too many for builders' comfort. A lot of homes already built for the GI's aren't selling.
The mortgage department head of one of the larger banks in Detroit says there are about 3,500 new unsold homes (built on veterans' priorities and not salable to the general public for 60 days after being put on the market) in the northwest section of that city. He adds that there are about 5,000 more well along that may also be a drug on the market at present prices when finished.
The story of one New Jersey ex-soldier helps illustrate why many veteransand nonveterans-are discouraged on the prospect of getting themselves housed under present conditions.
The Jerseyite came out of the Army last year and had a contractor start building a house, tentatively estimated to cost $12,000. Building drug on, and every time the buyer and the contractor met, the latter said it looked like the house would cost a little more. Finally, several months ago, the contractor said the job would come to $20,000. And that's where the ex-soldier baled out-sold his interest in the place to another. The payoff: Latest indication is, according to the new buyer, that the place will cost $30,000.
Builders' shrinking interest has construction contractors in many localities scouring their neighborhood for work-and offering their services for less money. Says one New Jersey builder: "Work is becoming very scarce, and apparently contractors are operating at smaller profits in an effort to keep going.'
Many builders compare today's prohibitive building costs to those which put a brake on post-World War I building. Building material prices were at their peak in 1920 in that period. And in 1920 little more than 200,000 new homes were started.
New dwelling units started in 1921 rose above 400,000, and in 1922 new homes went above 700,000. But meanwhile-between April 1920 and March 1922building material prices tumbled over 40 percent.
SHORTAGES PLAGUE BUILDERS
Building materials shortages still plague the home-construction industry, according to a survey conducted by the National Association of Home Builders. Querying its members, who comprise 80 percent of the country's home builders, the association reports that gypsum lath, used largely as a wall material, and hardwood flooring head the list of scarce items.
Labor, which has not taken a high position of previous ratings of bottleneck items, occupies sixth place on the new list. More than 2 builders out of 10 reported that a shortage of skilled labor is a threat to their building programs.
The survey revealed, too, that several other items formerly in short supply are now becoming abundant. Items which were prominently featured on previous bottleneck lists but which were mentioned by less than 2 percent of builders reporting on the latest query include, brick, screen wire, asphalt tile, and readymix concrete.
These are the 10 items which builders say are their chief bottlenecks together with the percentage of builders who report the items as scarce: Gypsum lath, 35 percent; hardwood flooring, 32 percent; millwork, 28 percent; plumbing, 27 percent; doors, 24 percent; labor, 22 percent; warm air furnaces, 19 percent; plaster, 18 percent; electrical material, 18 percent; nails, 17 percent.
LUMBER LEADS HOUSING MATERIALS IN PRICE RACE THAT HAS BUILDERS BALKING
Star performer among high-fiying building materials prices is that of lumber. By the first of this month, as measured by the Bureau of Labor Statistics wholesale index. it had hit a level 161 percent above prewar 1939. Paint and paint materials are running second place with a gain of 109 percent over the 1939 average. Cement and structural steel, with increases of 18 percent and 20 percent, respectively, have made the smallest gains. (Cement price boosts of 10 cents to 20 cents a barrel last week are not reflected here.) With all building materials as a group now 86 percent above 1939, builders across the Nation are balking at undertaking new construction.
Mr. ROOSEVELT. It is clearly impossible to survey the current housing problem and deny that immediate action is necessary. If the Congress refuses to act, it is in effect saying to their veterans: "We know that you face a housing problem and we are grateful to you for having won the war, but don't bother us with your troubles."